Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
A scale-and-last-mile cost machine: 280 million weekly customers across 10,900+ stores, buying power that funds everyday low prices, and a store network that now fulfills e-commerce in hours.
Walmart runs a scale-funded price and proximity machine that Amazon cannot copy with warehouses alone and that Costco does not open to non-members:
- Buying Power at Grocery Scale: FY2026 revenue was $713.2B. Q2 FY2027 added $187.9B more (+5.9% YoY, +5.1% constant currency). That volume still buys the lowest landed cost in U.S. grocery and general merchandise, which is what lets Walmart put tariff refunds back into price rather than pocketing them. No regional grocer, and no warehouse club that requires a paid card at the door, matches this traffic base.
- Stores as the Last Mile: Global e-commerce grew 23% in Q2 and is now 24% of net sales. Walmart U.S. e-commerce grew 24%, store-fulfilled delivery ~43%, and expedited deliveries under three hours were ~37% of store-fulfilled orders. The 10,900-store grid is the fulfillment network. Amazon is still building grocery proximity; Walmart already has it, and 3,100 U.S. stores now sit on automated freight with more than half of e-commerce volume running through automated facilities.
- High-Margin Overlay on the Same Trips: Advertising, marketplace, and membership sit on top of the same weekly baskets. Global advertising grew 38% in Q2 (Walmart Connect +43% excluding VIZIO) off a FY2026 base of nearly $6.4B. Marketplace sales grew 52%. Global membership fee revenue grew 17%, with a record Q2 for Walmart+ net adds; Sam's Club membership fees grew 6%. These lines are still a rounding error on $700B+ of sales and a much larger share of profit — that is the mix shift the multiple is paying for.
- Share Gains Across Income Tiers: Walmart U.S. comps were +2.6% ex-fuel in Q2, led by transactions (+1.5%) and units, with an 80 bp health-and-wellness headline drag and a 125 bp pharmacy headwind from maximum-fair-price regulation. Management says core merchandise has been a 3–4% comp for two and a half years, and share gains continue across categories and income tiers, led by upper-income households. The flywheel is still taking customers from higher-priced banners; it is not only a low-income defensive.
Moat Verdict
Walmart is a net AI beneficiary in operations and a net AI-resilient franchise in structure. The moat that matters is physical: supplier-funded prices and a store grid that now fulfills in hours. Advertising and marketplace ride that traffic; they do not replace it. AI weakens the app-and-recommendation surface — agents will shop around — and does not replicate 10,900 stores or $700B of buying power. The live risk is not disruption of the moat. It is paying mid-30s earnings multiple for a 5% sales compounder if the high-margin overlay slows.
73.6 resilient · 51.7 vulnerable · 80/20 = 69.2 · = 69
Open a moat to read its note.
The Walmart app, Scan & Go, and pickup flow are habitual but table stakes. An agent can shop Kroger, Target, or Amazon through the same chat window. Interface lock-in is not the moat.
Walmart is not a software-logic business. Everyday-low-cost merchandising and store-fulfilled routing are operating advantages, not vendor-owned logic competitors cannot copy the way they cannot copy Palantir's ontology or Oracle's database runtime.
Retail purchasing data is not exclusive access to a public dataset. Any data advantage is proprietary closed-loop purchase history, scored under proprietaryData.
The moat is scale, logistics, and supplier terms, not a scarce specialist talent pool. Store labor and merchandising talent are real operating inputs, not a structural lock.
Walmart+ (delivery, fuel, membership perks) and Sam's Club (paid warehouse plus Plus) are real bundles, and Q2 membership fee revenue grew 17% globally. They are not Costco's membership-is-the-product model: the supercenter still works without the paid card, so the bundle is additive rather than the gate.
Closed-loop grocery purchase data plus VIZIO CTV inventory is what Walmart Connect sells to CPG advertisers, and Q2 advertising grew 38% off a FY2026 base of nearly $6.4B. That dataset is valuable at this frequency of trips. It is not unreplicable without the franchise in the Threat Graph / claims-file sense — Amazon, Kroger 84.51, and Target Roundel run analogous retail-media graphs. Scale is the edge; uniqueness is not.
Pharmacy reimbursement rules (maximum fair price) are currently a 125 bp comp headwind, not a switching barrier. Retail is not a certification-gated franchise.
Marketplace sellers and advertisers ride Walmart's traffic, which is a real two-sided layer but a secondary one. The supplier-terms flywheel previously rated strong here is scale, and is now rated under scaleEconomics.
Grocery is a weekly trip, Walmart+ auto-renews, and pharmacy scripts plus Scan & Go sit in the basket. That is habit and a paid membership, not a payment rail. Costco's exclusive Citi Visa is a stronger embedding; Walmart's private-label card is optional. Alternatives (Kroger, Amazon, Costco) remain one parking lot away.
Walmart is a habitual destination, not a business system of record. Downstream systems do not defer to Walmart for identity, payments, or another firm's inventory. Trip habit and membership are already scored on bundling, transactionEmbedding, and networkEffects.
The largest retailer by volume: 280 million weekly customers across 10,900+ stores give supplier terms that fund everyday low prices, and a store grid that now fulfils in hours, with e-commerce already 24% of net sales. (The supplier-terms evidence moved here from networkEffects.)
Everyday-low-price perception is the customer-facing face of the scale rated under scaleEconomics, not an independent premium; counting it again would double-score the same evidence.
Moat in 5–10 years
Walmart's moat holds. Scale economics is already strong on 280 million weekly customers and a store grid that fulfils in hours, so it cannot widen, and no rival is closing that gap. Walmart Connect is growing fast (advertising +38% in Q2), but Amazon, Kroger and Target run comparable retail-media graphs, so the purchase data stays intact rather than widening, consistent with the Amazon file holding. The weakened app interface is already charged for agents shopping across retailers.
No moat trending · 69 holds
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
A scale-and-last-mile cost machine: 280 million weekly customers across 10,900+ stores, buying power that funds everyday low prices, and a store network that now fulfills e-commerce in hours.
Growth Score
Q2 FY2027 (reported August 20) printed $187.9B of revenue, +5.9% YoY and +5.1% in constant currency, and management raised FY2027 sales growth to +4.0–5.0% cc and adjusted operating income to +7.0–8.5% cc. The growth that matters is the mix: global e-commerce +23% and now 24% of net sales, advertising +38%, membership fees +17%. U.S. comps of +2.6% look slow until the 125 bp pharmacy-MFP drag is stripped off; core merchandise is still a 3–4% compounder. Adjusted EPS guided to $2.80–$2.87 from FY2026's $2.64. Capex stepped up to ~4% of sales, which is why H1 free cash flow fell $1.4B to $5.5B even as operating cash flow rose $1.4B to $19.7B.
Valuation Score
At $106.73 (September 18 close) Walmart sits about 7% below the $115 base case and 37% above the $78 bear. The stock has come in from a $135.16 52-week high, but it still trades at ~37× FY2027 guided EPS ($2.80–$2.87) and ~39× trailing GAAP ($2.76). That is a quality-retailer multiple, not a discount-store multiple. Modest upside if the ads/membership mix keeps lifting earnings faster than sales; limited margin of safety if comps stall.
The Everyday-Low-Cost Flywheel
Walmart runs a scale-funded price and proximity machine that Amazon cannot copy with warehouses alone and that Costco does not open to non-members:
- Buying Power at Grocery Scale: FY2026 revenue was $713.2B. Q2 FY2027 added $187.9B more (+5.9% YoY, +5.1% constant currency). That volume still buys the lowest landed cost in U.S. grocery and general merchandise, which is what lets Walmart put tariff refunds back into price rather than pocketing them. No regional grocer, and no warehouse club that requires a paid card at the door, matches this traffic base.
- Stores as the Last Mile: Global e-commerce grew 23% in Q2 and is now 24% of net sales. Walmart U.S. e-commerce grew 24%, store-fulfilled delivery ~43%, and expedited deliveries under three hours were ~37% of store-fulfilled orders. The 10,900-store grid is the fulfillment network. Amazon is still building grocery proximity; Walmart already has it, and 3,100 U.S. stores now sit on automated freight with more than half of e-commerce volume running through automated facilities.
- High-Margin Overlay on the Same Trips: Advertising, marketplace, and membership sit on top of the same weekly baskets. Global advertising grew 38% in Q2 (Walmart Connect +43% excluding VIZIO) off a FY2026 base of nearly $6.4B. Marketplace sales grew 52%. Global membership fee revenue grew 17%, with a record Q2 for Walmart+ net adds; Sam's Club membership fees grew 6%. These lines are still a rounding error on $700B+ of sales and a much larger share of profit — that is the mix shift the multiple is paying for.
- Share Gains Across Income Tiers: Walmart U.S. comps were +2.6% ex-fuel in Q2, led by transactions (+1.5%) and units, with an 80 bp health-and-wellness headline drag and a 125 bp pharmacy headwind from maximum-fair-price regulation. Management says core merchandise has been a 3–4% comp for two and a half years, and share gains continue across categories and income tiers, led by upper-income households. The flywheel is still taking customers from higher-priced banners; it is not only a low-income defensive.
Moat Verdict
Walmart is a net AI beneficiary in operations and a net AI-resilient franchise in structure. The moat that matters is physical: supplier-funded prices and a store grid that now fulfills in hours. Advertising and marketplace ride that traffic; they do not replace it. AI weakens the app-and-recommendation surface — agents will shop around — and does not replicate 10,900 stores or $700B of buying power. The live risk is not disruption of the moat. It is paying mid-30s earnings multiple for a 5% sales compounder if the high-margin overlay slows.
73.6 resilient · 51.7 vulnerable · 80/20 = 69.2 · = 69
Open a moat to read its note.
The Walmart app, Scan & Go, and pickup flow are habitual but table stakes. An agent can shop Kroger, Target, or Amazon through the same chat window. Interface lock-in is not the moat.
Walmart is not a software-logic business. Everyday-low-cost merchandising and store-fulfilled routing are operating advantages, not vendor-owned logic competitors cannot copy the way they cannot copy Palantir's ontology or Oracle's database runtime.
Retail purchasing data is not exclusive access to a public dataset. Any data advantage is proprietary closed-loop purchase history, scored under proprietaryData.
The moat is scale, logistics, and supplier terms, not a scarce specialist talent pool. Store labor and merchandising talent are real operating inputs, not a structural lock.
Walmart+ (delivery, fuel, membership perks) and Sam's Club (paid warehouse plus Plus) are real bundles, and Q2 membership fee revenue grew 17% globally. They are not Costco's membership-is-the-product model: the supercenter still works without the paid card, so the bundle is additive rather than the gate.
Closed-loop grocery purchase data plus VIZIO CTV inventory is what Walmart Connect sells to CPG advertisers, and Q2 advertising grew 38% off a FY2026 base of nearly $6.4B. That dataset is valuable at this frequency of trips. It is not unreplicable without the franchise in the Threat Graph / claims-file sense — Amazon, Kroger 84.51, and Target Roundel run analogous retail-media graphs. Scale is the edge; uniqueness is not.
Pharmacy reimbursement rules (maximum fair price) are currently a 125 bp comp headwind, not a switching barrier. Retail is not a certification-gated franchise.
Marketplace sellers and advertisers ride Walmart's traffic, which is a real two-sided layer but a secondary one. The supplier-terms flywheel previously rated strong here is scale, and is now rated under scaleEconomics.
Grocery is a weekly trip, Walmart+ auto-renews, and pharmacy scripts plus Scan & Go sit in the basket. That is habit and a paid membership, not a payment rail. Costco's exclusive Citi Visa is a stronger embedding; Walmart's private-label card is optional. Alternatives (Kroger, Amazon, Costco) remain one parking lot away.
Walmart is a habitual destination, not a business system of record. Downstream systems do not defer to Walmart for identity, payments, or another firm's inventory. Trip habit and membership are already scored on bundling, transactionEmbedding, and networkEffects.
The largest retailer by volume: 280 million weekly customers across 10,900+ stores give supplier terms that fund everyday low prices, and a store grid that now fulfils in hours, with e-commerce already 24% of net sales. (The supplier-terms evidence moved here from networkEffects.)
Everyday-low-price perception is the customer-facing face of the scale rated under scaleEconomics, not an independent premium; counting it again would double-score the same evidence.
Moat in 5–10 years
Walmart's moat holds. Scale economics is already strong on 280 million weekly customers and a store grid that fulfils in hours, so it cannot widen, and no rival is closing that gap. Walmart Connect is growing fast (advertising +38% in Q2), but Amazon, Kroger and Target run comparable retail-media graphs, so the purchase data stays intact rather than widening, consistent with the Amazon file holding. The weakened app interface is already charged for agents shopping across retailers.
No moat trending · 69 holds
Growth Analysis
Growth Drivers
Key Risk
If Walmart U.S. core merchandise comps break below 3% for two consecutive quarters in FY2028 while global advertising decelerates below 20%, the mix-shift that supports a mid-30s earnings multiple is not happening fast enough and the stock re-rates toward a high-20s staple multiple.
Score Derivation
66.3 base + 2.7 trajectory + 4 margin − 5 risk = 68
Base 66.3 (5-8% blended CAGR, midpoint 6.5%) + 2.7 trajectory (e-commerce and advertising accelerating; membership stable) + 4 expanding margins − 5 moderate key risk = 68
Key Growth Catalysts
Store-fulfilled delivery and marketplace turning the existing U.S. store grid into a same-day network — e-commerce already 24% of net sales and contributing ~510 bp to the U.S. comp
Retail media (Walmart Connect + VIZIO CTV) compounding off a ~$6.4B FY2026 advertising base at +38% in Q2, a high-margin overlay on grocery trips Amazon and Kroger also want
Walmart+ record Q2 net adds and Sam's Club membership (+6% fee revenue) lifting the paid-member mix that spends more and visits more
International: Q2 net sales +12.8% (+7.9% cc), e-commerce +19% and ~30% mix, China +20.7% cc — Flipkart Big Billion Days timing is a >100 bp Q3 sales headwind, not a demand break
Automation: 3,100 U.S. stores on automated freight and >50% of e-commerce volume through automated facilities, which is how e-commerce economics improve while capex runs at ~4% of sales
Price Scenarios (12–24 Months)
Price vs Targets
Dashed lines mark the 12–24 month bear, base and bull targets. Daily closes.
Valuation Analysis
Fair value of $115 assumes FY2028 EPS around $3.15–$3.25 (high-single-digit compounding off the $2.80–$2.87 FY2027 guide) and a mid-30s multiple that the market already pays for Costco-like quality without Costco's 10% sales growth. The bull case needs advertising and membership to keep compounding at 20%+ and the multiple to hold near 40×. The bear case is a consumer recession plus pharmacy drag that leaves the stock at ~26–28× trough earnings. $115.
Valuation Multiples
| Trailing P/E (GAAP) | ~39× |
| Forward P/E (FY2027E) | ~37× |
| PEG Ratio | ~4× |
| Price / Sales (NTM) | ~1.15× |
| Price / FCF | ~55–70× |
At ~37× FY2027 guided earnings Walmart is expensive versus Target (~16×) and the discount-store median (~21×), and only a modest discount to Costco's low-40s forward multiple. The PEG around 4× says the market is paying for mix, not for 5% sales growth. Trailing GAAP (~39× on $2.76) and forward (~37×) are close — there is no earnings ramp hiding in the multiple. Free cash flow is the soft spot: capex stepped to ~4% of sales, H1 FCF fell to $5.5B, and P/FCF in the 55–70× range is a growth-stock print on a staple cash-flow profile.
Approximate figures as of September 19, 2026 (Q2 FY2027 print; price $106.73).
Where We Are vs Targets
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A softer consumer plus a sticky pharmacy-MFP drag leaves U.S. comps in the low-2s, advertising decelerates into the teens, and the mid-30s multiple compresses toward a high-20s staple rating.
- Walmart U.S. comps including health and wellness stay at ~2.6% or worse for two consecutive quarters in FY2028 as the 125 bp maximum-fair-price pharmacy headwind persists and core merchandise breaks below 3%
- Global advertising growth decelerates below 20% as retail-media inventory at Amazon, Kroger, and Target catches up, so the mix shift no longer lifts operating income faster than sales
- Tariff-refund gross-margin help from Q2 rolls off while price investments continue, and FY2028 adjusted operating-income growth misses the 7% handle
- The multiple compresses toward ~26–28× on ~$2.80 of earnings — still a premium to Target, no longer a Costco-quality print
Mid-single-digit sales, high-single-digit earnings, and a stable mid-30s multiple as e-commerce, advertising, and membership keep taking mix.
- FY2027 lands inside the raised 4.0–5.0% cc sales and 7.0–8.5% cc adjusted operating-income guides, with adjusted EPS at or above the $2.80–$2.87 range
- Global e-commerce holds a 20%+ rate and mix moves toward the high-20s of sales as store-fulfilled delivery and marketplace stay the contribution to the U.S. comp
- Advertising and membership continue to grow faster than the banner, keeping consolidated operating margin expanding even as capex runs near 4% of sales
- FY2028 EPS compounds into the low-$3s and the stock holds ~35–36×, which is $110–$115 without a re-rating
Retail media and paid membership become a visible profit engine, e-commerce mix clears 30%, and the multiple holds near 40× on faster earnings.
- Global advertising compounds at 25%+ off the ~$6.4B FY2026 base and, with membership, becomes a disclosed third of operating profit rather than a mix comment
- E-commerce mix clears 30% of net sales with marketplace and sub-three-hour delivery still taking share from Amazon grocery in upper-income households
- International holds high-single-digit constant-currency growth after the Flipkart calendar noise, with China and Flipkart ads still the accelerant
- FY2028–29 EPS moves toward $3.50+ and the stock re-rates toward ~40×, putting $140–$145 in range without needing Costco's warehouse math
WMT: common questions
Is Walmart stock a buy?
We rate Walmart Hold, with a composite score of 69/100: moat 69, growth 68 and valuation 71. The valuation score is struck against our bear, base and bull targets and moves with the price.
What is Walmart's moat?
Walmart scores 69/100 on moat. A scale-and-last-mile cost machine: 280 million weekly customers across 10,900+ stores, buying power that funds everyday low prices, and a store network that now fulfills e-commerce in hours.
How fast is Walmart expected to grow?
We estimate 5-8% a year over the next three to five years, for a growth score of 68/100.
What is Walmart's price target?
Our base case is $115, with $78 in the bear case and $145 in the bull case.